1 Property Investment Company, FRS 102 or FRS 105?

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Hey all

Just taken on a 1 property property investment company and looking to see if FRS 105 is an option. According to info Ive read here then it is, however on HMRC website they say "investment" companies dont qualify for FRS 105. Company hits all the criteria as well. Its never been valued and never accounted for deferred tax!

Is FRS 105 an option?


Replies (8)

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By paul.benny
08th Mar 2021 08:57

Maybe you could post a link to the HMRC guidance you're referring to. My guess is that is referring to companies investing in shares rather than companies that hold investment property.

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Replying to paul.benny:
By Paul Crowley
08th Mar 2021 09:23

Do not have any so never really considered
But just one property?
And we are talking about accounts, not tax

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By Duggimon
08th Mar 2021 09:03

Investment undertaking is defined here: https://www.legislation.gov.uk/eudr/2013/34/article/2

(14)‘investment undertakings’ means:
(a)undertakings the sole object of which is to invest their funds in various securities, real property and other assets, with the sole aim of spreading investment risks and giving their shareholders the benefit of the results of the management of their assets,

Strictly speaking that seems to rule it out, but I don't know if that's a harsh interpretation.

Personally I'd do it under FRS 102 1A anyway because I don't think FRS 105 can show a true and fair view for a property company.

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Replying to Duggimon:
By [email protected]
09th Sep 2021 14:25

FRS 105 covers Investment properties. See FSR-105 2018 Section 12.

The drawback is, the property price in your balance sheet has to be the historical purchase price. So, if you are trying to source for funds for your business, this might be the initial drawback. But you can always have a reevaluation handy to explain the true picture.

Less reporting info compared to FRS 102

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By Wanderer
08th Mar 2021 09:20

goosepoo wrote:

Is FRS 105 an option?

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By goosepoo
08th Mar 2021 09:32

Thanks for the replies all, decision made. 105 it is.

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By thestudyman
08th Mar 2021 23:25

Remember the revaluation model is not allowed in frs 105!

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Replying to thestudyman:
By andrew1211
11th Mar 2021 12:44

Yes good, especially when moving a development property from stock into fixed assets......

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